MALVIN V. WERT.
'121 Garnishee. 1
STADLER
and others v.
OARROLL,
(Czrcuit Oourt, S. D. TezaB. February, 1884.) ASSIGNMENT.
An assignment which authorizes the assignee to sell the assigned goods on credit, which undertakes to distribute the remnant after paying consenling creditors, in opposition to the terms and provisions of the law, and by which the assignees, by such distribution, exclude from the benefits of the assignment their individual creditors, and reserve an interest for themselves, is unauthorized by law. Lawrencev. .J.V01'ton,15 FED. REP. 853; and Mutter v. Norton, ante, 719, followed.
On Demurrer to Answer of Garnishee. Crawford ct Crawford, .for plaintiffs. Wright ct Wright and J. A. CarroU,for garnishee. . PARDEE, J. The assignment in this case, which is under.section 3 of the act of 1879, is attacked for fraud apparent on its face, towit: (1) It prefers creq.itors for rent, taxes, and assessments. (2) It authorizes the assignee to sell the asaigneq. goodson credit. (3)It undertakes to distribute the remnant after paying consenting creditors, in opposition to the terms and provisions of the law. (4) The assignors, by such distribution, exclude from. the benefits of the assignan interest for. themment their individual creditors, and selves. The case of Lawrenc.e v. Norton, 15 FED. REP. 853, and Muller v. Norton, ante, 719, gives sufficient reasons for sustaining the second, third, and fourth grounds. On the first ground it is not neoessary to pass. The demurrer is sustained. MOCORMIOK,
J., ooncurs.
MALVIN
and others
tI. WERT,
(Clircuit Court, N. D. Tea;a8. February, 1884. . ASSIGNMENT TO CREDITORS.
An assignment for the benefit of all the creditors, without proof or euggcs tion of insolvency, where there is no attempt to prefer any creditor, but & de· cided attempt to hinder and delay them all, is unauthorized by law.
On Demurrer to Answer. Ray it Stanley and L. T. Smith, for plaintiffs. Wright it Wright, for defendant. 1 Reported
by Joseph P. Hornor, Esq., of the New Orleans bar.
v.19,no.l0-'6
722
RBPORTER.
PARDEE, ;r. In this case, which is one of assignment for the benefit of all the creditors, there is no att.91Dpt, to prefer anY,creditor, but a very decided attempt to hinder and delay them all. Without any suggestion of insolvency, or contemplation of insolvency, the assignol' provides that his assignee shall dispose of the assigned goods, consisting of wares, liquors, aQd merchandise, in the customary course of trade, for 60 days, and then, if there is anything left undisposed of, the remaining goods shall be sold. at public auction for cash, after advertising during the time provided by law for the sale of property seized under execution,. and providing that during the delay of advertising the assignee shall continue the disposition of goods at private sale. The assignee is given no option. The course laid out in the assignment is the one he is bound to follow. The time required by law for advertising goods to be sold under execution not less than 10 days. The then, without any suggestion of insolvency, <lompels the creditors too, forced stay of 70 days. If the assignor <lan compel a stay of 70 days, why not for 7 times 70 days? We find no authority in the law of 1879 for such provision. We are aware that assignments that make no preferences, but provide for an equal distributionaraong all the creditors, should be favored; "Equality is justice." 'It is with this view that we lay no stress on the objections urged against this assignment, that the deed does not show the maker's insolvency, nor 'assign in terms all thtl property that the debtor may have subject to the demands of his creditors. If the debtor has property concealedwithiIi the state, the law aids the assignment, and if the property can be found it passes to the assignee. See Blum v. Welborne, '58 Tex. 157. If the debtor has property beyond the state it can be reached by credit.ors who may so· choose, just as well as if the assignment had not been made, for the assignment compels the discharge of no debt, nor the release of the debtor. But with this disposition to favor and sustain'this&ssignment, weare unable to see our way clear to sanction the enforced stay of execution which hinders and delays all creditors, and, being unauthorized by law, consequently defrauds them all. The demurrer is sustained. MCCORMICK,
J., . concurs. .
UNITED STATES. V. WHITE.
723
UNITED STATES
11.
WHITE, Receiver, etc.
'Circuit CQurt, N. D. New YQ'f'k. MarcJ;!. 13,1884.) TAXATION-NoTES UBED FOR lJIRcuLATION-NoTES HEDEEMABLE m
The tax imposed by the act of congress of February 8, 1876, 19, upon" notes used for circulation," is a charge upon such notes only as are intended to circulate as money, The act bear!! no reference to the so-called notes isSued by mercantile firms to be redeemed in goods,'
GOOD8.
At Law. Martin I. Townsend,·U. S. Atty., for the United States. John L. White, for defendant. WALLACE, J. This isa writ of error to the district court for the Northern district of New York, brought to review a judgment of that court in favor of the defendant. The first question presented by the of exceptions is whether certain obligations issued by the firm of Aldrich, Sweetland & Co; are liable to taKation under section 19 of the act of congress of February'8,1875, entitled "An act to amend existing customs and internal revenue laws, and for other purposes." Section 19' reads as follows; '" "Every person, firm, or association other than national bank associations, and every corporation, state bank, or state banking association, shall pay a tax often per centllm on the amountof·theirown notes used for circulation, and paid out by them." The firm of Aldrich, Sweetland & Co., merchants, had issued,
paid out, and put intocircu!ation, in the neighborhood of their place of business, their obligations ·or. to pay in goods at their store, varying in amount from 5 cents to $5 each, and amounting in the aggregate to nearly $5,000, jn form as follows: "Due the bearer one dollar in goods at our store. Kennedy, N. Y., Oct. 14, 1878. ALDRICH, SWEETLAND & Co." . . If the meaning of the term, for not be sat.isfactorily ascertained by to other acts of 'congress in pari materia, question presented would be a more doubtful one, beoause, although such promises to pay are not negotiable notes, inasmuch as they are not payable they are notes within the generally-accepted meaning of the .word. A literal reading of the section would subject to taxation every note an individual might execute and deliver, unless there is somespecial meaning to the term, "used for circulation;" yet no one would the section was designed to have this extended More especially would such a cpnstroction be astartling,'9De, in yiew .of the provisions of section 20 of the same act, wpich iIX1-poses a tllox 10 per centum on the notes of any person, firm, Of corporation. used for circulation by f 11 other persons, firms,. and corporatiolls. It is not to be supposed congress intended by the. act; illquestiol;l. to. subject (1,11 promissoq notes. circulating in the of: the country to a tax of 10